Spain Approves Hydrogen Strategy to Spur Low-Carbon Economy

MADRID (Reuters) — Spain approved on Tuesday a plan to boost clean hydrogen production, aiming to build enough infrastructure to give it a major role in Europe's market for a fuel seen as key to meeting international carbon emissions targets. 

The European Union is pushing to develop its capacity to produce hydrogen, widely used in heavy industry, from renewable power sources, currently a prohibitively expensive process.

Spain hopes its well-developed gas storage and transport system, combined with the plentiful sunshine and windy hillsides that make it a prime location for renewable energy plants, will eventually help it make enough of the fuel to export.

Madrid calculates that its hydrogen ambitions will cost 8.9 billion euros ($10.5 billion) over the next 10 years. It expects most of this to come from the private sector but may support projects that create jobs.

By 2030, Spain aims to install 4 gigawatts-worth of the electrolyzers needed to split water into hydrogen and oxygen, one tenth of the EU's target for 40 gigawatts across the bloc, the energy and environment ministry said in a statement.

It intends to hit the ground running with 300-600 MW by 2024. The EU wants 6 gigawatts by then.

The plan is to replace a quarter of the almost 500,000 tonnes of fossil-based hydrogen consumed by industry every year with the renewably-sourced version, and put thousands of hydrogen-powered vehicles on Spain's roads and railways.

France has pledged 2 billion euros for hydrogen projects over the next two years, while industrial powerhouse Germany has earmarked 9 billion euros by 2030.

Homegrown energy giant Iberdrola is building what it describes as Europe's biggest such project for industrial use near a former coal-mining town in Spain, for 150 million euros.

Oil and gas group Repsol, meanwhile, plans to produce synthetic fuels using green hydrogen at its northern Spanish refinery in partnership with Saudi oil giant Saudi Aramco.

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